Caught off guard by the political explosion in Egypt, the U.S. and the EU have been cautious in taking a public stance as they seek to balance their commitment to promoting democratic politics and fears of fueling unpredictable change with unforeseeable consequences.

Amid the strident furor about media freedom in Europe, Budapest has also started actively defending itself in the U.S. against charges that new Hungarian press laws will restrict reporting and could portend anti-democratic moves on a broader scale.

Sweeping changes in the EU's financial regulatory architecture went into effect on January 1. Many details, including key personnel appointments, remain to be implemented in the coming months, but the new institutional framework is set. An authoritative and clearly presented outline of this complex new system is available on this page from the website of Clifford Chance, a global law firm based in London (that works extensively on EU matters).

The Sudan’s likely break-up and the emergence of a new nation in the southern part of the country is the latest example of partition enjoying the backing of both the EU and the U.S., a theme discussed in European Affairs last month.

Could cuts in defense spending across the EU establish a collective capability to act autonomously or join the U.S. future military operations? Or will reduced troop and equipment levels across Europe leave the U.S. in a situation where it will have to act alone in expeditionary missions – a situation that many analysts say would jeopardize NATO’s collective future?

Europe’s financial troubles will probably lead the EU and the eurozone to a stronger fiscal system – but only after a bumpy ride this year, according to Simon Johnson, a U.S- based economist who has been prescient about the crisis. In his view, the eurozone can weather an intensifying financial whirlwind at the cost of three crucial conditions:

Reports of renewed efforts by France and some other member states to modify the EU’s boycott on weapons sales to China have been met with firm denials in Brussels that any change is imminent in the European stance. “The timing is wrong: it would make little difference to Beijing at this point, but it could do real damage in Washington at a moment when Europe might be able to score its biggest-ever transatlantic military sale in the EADS airborne refueling tanker,” according to a European expert. Any shift in favor of the Chinese military would probably arouse a strong anti-European backlash in the new Congress, he said.